Crude Oil Futures

Crude oil is the world's most traded and sought after commodity. Crude oil futures are agreements that set the price for crude oil delivery in the future, and speculators increasingly use them to hedge against inflation and provide liquidity in oil markets.

More About Crude Oil Futures

Continue reading to learn more about:

Crude oil
Crude oil stock symbol
Types of Crude Oils
Crude Oil Industry
Other information about Crude Oil Futures

1 Step 1

Crude oil

Crude oil futures are simply contracts that obligate the buyer to purchase a specific amount of crude oil from a seller at a predetermined time and place for a predetermined price. Crude oil, or petroleum as it is more commonly known, is a component of many products you use everyday, including plastics and synthetic rubber. Refined petroleum products are used for things such as gasoline for your car or heating oil for your home. Crude oil futures are an extremely important part of U.S. petroleum demand.


Crude oil stock symbol

Crude oil is both a vital commodity for modern living, and an uncertain investment option. Traders, investors and consumers alike wonder the viability of this diminishing resource. But oil is not going away anytime soon. Global demand is on the rise, and with it global prices. Plans to create alternative sources of power may prove to be costly in both time as well as money, and with oil producing countries rethinking production quotas amid skyrocketing demand and short supply, this commodity will remain in demand for decades to come.


Types of Crude Oils

Crude oil is a dark brown to black greasy liquid that is a naturally occurring mixture of thousands types of hydrocarbons. Not all crude oils are the same and depending on the crude oil's source, characteristics of the oil such as viscosity, sulfur content, density, and API gravity will vary.

Crude oils can be categorized into four major types:

•Light sweet Crude Oil (WTI)

•Medium Sweet Crude Oil (Mid-West Sweet Crude)

•Heavy Crude Oil (Brent)

•Extra Heavy Crude Oil (California)

  • Crude Oil Industry

    The Crude Oil Industry is one of the most essential components of the world economy. It is a huge industry with a market capitalization of trillions of dollars and it is getting larger each year. This industry is being affected and driven by several factors, including economic growth, trade balance, monetary policy, production records and many others. Based on these factors, a prediction can be made about where the crude oil prices are going and revealing trends that prove to be successful.
  • Other information about Crude Oil Futures

    Traders use crude oil futures to lock in a price of oil that they can deliver to their customers. Crude oil futures are traded on the New York Mercantile Exchange, which requires traders to put up a monetary collateral in order to trade. This is called the maintenance margin. The initial margin is 50% of the maintenance margin and it is used to secure financial losses. If the value of a trader's account falls below his maintenance margin requirement, he must deposit more money into his account or his position will be liquidated by the exchange.